Biofuels - Feb 13

Biofuel targets raised by govtRadio New Zealand Oil companies say they will have to work out how biofuels can be sold at the pump, after a government announcement increasing targets for their use.

From next year, biofuels must make up 0.2% of all transport fuel sold in New Zealand, rising to 3.4% by 2012. Shell Oil says petrol and ordinary diesel will continue be sold for the forseeable future. General manager, Jim Collings, says the government may need to consider cost incentives, such as cutting excise tax, to encourage motorists to use biofuels.

Shell Oil says it is likely to trial biodiesel at truck stops before deciding how to proceed. A British company says it has been looking at establishing a plant here for some time. Argent Energy produces low-emission biodiesel from beef tallow.

Argent Energy New Zealand managing director Dickon Posnett, says the company has signed a letter of intent to supply Shell Oil and is now looking for a site to produce about 75,000 tonnes per year. The Automobile Association says that when biofuel blends go on sale, they must be labelled clearly so consumers have a choice, and alternative mineral fuels must be available. (14 Feb 2007)See also ’tokenism’ criticism from a visiting Professor of Infectious Diseases and Immunology.-LJ

Life on the Ethanol-Guzzling PrairieTimothy Egan, NY Times ...What is happening here is a vision that many in rural America see as their salvation: high-performance moonshine from amber fields of grain, and a “grass station” in every town. It may be a chimera. It may drain precious water from the arid plains and produce less energy that it uses.

But it has the undeniable power of an idea in ascendancy.

In part this is because the ethanol economy, as it grows before our eyes, is looking less like a taxpayer-financed Big Plan dominated by a single agribusiness corporation and more like something that might bring fresh jobs and local control back to farm country.

The vision of a decentralized ethanol industry is taking shape, albeit an industry aided by tax breaks and government mandates. There are now 113 American ethanol plants and an additional 77 under construction, according to the Renewable Fuels Association, the industry trade group. Most of them are right in the middle of the Farm Belt, in counties that have been losing people since the Depression. (11 Feb 2007)

Ethanol may fuel inflationRachel Beck, Beacon Journal NEW YORK - Forget about oil as the inflation bogeyman we should fear the most. The surging price of corn is the latest threat to American wallets, and where it hits them might go beyond the supermarket.

The issue really starts with the government's push to increase the use of alternative fuels like ethanol to reduce reliance on foreign oil. Because most U.S. ethanol is made from corn, that burgeoning boom is straining corn supplies, and boosting prices.

That makes everything from soda (sweetened with high-fructose corn syrup) to the steak from corn-fed beef more expensive. It's also crimping ethanol producers' profitability, which could lead to calls for increased federal subsidies to keep them afloat.

This is all happening just as consumers are starting to feel relief from lower energy prices, which are down nearly 30 percent from the highs reached last summer. Inflationary concerns have shifted to corn, which has doubled in price from a year ago to a 10-year high of around $4 a bushel. ..

Should consumer food prices rise 10 percent -- which Merrill's Rosenberg notes is typical when prices surge like they have recently -- discretionary income could start to slide in the coming months. This could particularly hurt consumers on the lower end of the income scale, who spend 16 percent of their discretionary income on food compared with the 11 percent for those in the top-income quintile, Rosenberg said.

Of course, there are real long-term economic and environmental benefits of increasing the production and use of alternative fuels. Unfortunately, that might be hard for many Americans to see amid sticker shock at the supermarket. (10 Feb 2007)

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